Sunday, November 05, 2006

Conventional wisdom regarding Maine's economy cites high taxes and closed mills, but conventional wisdom is also a handy tool for political hacks. GrowSmart Maine has commissioned a study from the Brookings Institution that promises us that Maine "stands within reach of a new prosperity-" if we follow their think tank advice.

I've only read a bit of the report so far, but the executive summary cites some striking statistics. For example, between 1980 and 2000, Maine converted more than 1,300 square miles (an area the size of Rhode Island) from rural fields and woodlots to suburban subdivisions. "In the 1990s only Virginia lost a greater share of rural land than Maine." Maine is not an especially small state, and most of it is rural, but nevertheless, we plopped houses on farms and forests faster than Texans could turn their plains to shopping malls and Florida could turn its swamps into retirement communities. This has got to be rough news for Mainers inclined to think of those other places as self-consuming sprawl-slums: Maine is doing even worse.

Here's another one: Maine's population was increasing faster than the populations of 24 states in 2000, and has had the 5th highest rate of domestic in-migration since 2000. The new arrivals are wealthier, older, and increasing Maine's average per-capita income simply by being here. On paper, this looks good: Maine's per-capita income is now almost as high as the national average. But if you have a town of four people who each earn $20,000 a year and a millionaire moves in, the per-capita, or average income of that town will suddenly get very high, even if the original four residents lose their incomes entirely. Similarly, we can have thousands of rich retirees move here and improve our economic statistics, but the lives of those who are here now won't necessarily improve.

Indeed, the report notes that "many high-paying manufacturing and forest jobs have been replaced by lower-paying consumer services positions," such that job growth statistics mask a reality of decline.

So, migration is causing some problems, but not as many as most Mainers would have you believe. New arrivals are giving us jobs in the state's most promising sectors, from organic farming (thanks, Casco Bay bobos) to health care (thanks, all you geriatrics), to financial services (thanks, Martha Stewart and all the rest of those midcoast MBAs). In fact, maybe we could harness the wealth of our new arrivals to offset some of the problems posed by their arrival... say, by lowering taxes, conserving rural land and enhancing downtowns, and providing job training for the rest of us?

Well, the Brookings Institution has some advice about how to do that, too. More on the the solutions in a future post.

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